Expert tasks Buhari on conducive environment for Foreign Portfolio Investment

A management expert, Dr Abiodun Adedipe, has advised the Federal Government to create conducive business environment to stimulate inflow of Foreign Portfolio Investment (FPI) into the economy.

Adedipe gave the advice in an interview with the News Agency of Nigeria recently in Lagos while discussing the victory of Donald Trump as the U.S. President-elect.

He said that government should also concentrate on encouraging inflow of Foreign Direct Investment (FDI) and FPI without expectation of any assistance from the U.S. government.

According to him, Trump’s messages from his electioneering campaign indicate that his focus will be on America, while Africa and indeed Nigeria will take the back seat in his administration.

He said that the country should outgrow its dependence on foreign support by shifting attention to foreign investors that would stimulate sustainable economic growth.

“Foreign investors are not coming not necessarily because of foreign exchange scarcity that makes it difficult for them to bring in what they need here.

“They are not coming because of the perception of the business environment.

“Ironically, people like us receive a lot of investment enquiry; people having a lot of money they want to invest in Nigeria.

“What Nigeria lacks now are portfolio investors to invest in our stock and bond market,’’ Adedipe said.

He said that reduction in FPI started before the 2015 general elections due to the perceived tension in the political climate of the country.

“The way the politics of that transition was played made most investors to cash out their investment and took it out of the economy.

“The challenge is not that investments are not coming into the country.

“FDIs are coming in, but it is just that FDIs cannot make up for the volume that we used to have before the 2015 election.

“What drove that volume was the portfolio investors; it is responsible for the semblance of illiquidity in the foreign exchange market.

“Until we see it from that perspective, we will not address the challenges appropriately,” the economist said.

According to him, foreign investment increases Gross Domestic Product (GDP), boosts employment, increases productivity, lowers commodity prices and increases tax revenue accruable to government.

He said that a conducive business environment, favourable policies and stable socio-economic environment were essential in attracting foreign investment.